Texas House Bill HB3412

Texas 2025 - 89th Regular

• Filed: 2/26/25

Caption

Relating to notice of and assistance in filing an application for a residence homestead exemption from ad valorem taxation provided to a home buyer by a title insurance company or title insurance agent in connection with the closing and settlement of certain transactions pertaining to residential real property; authorizing a fee; providing for the imposition of an administrative penalty.

Impact

The impact of HB 3412 on state laws includes the incorporation of clear guidelines regarding the obligations of title insurance companies related to homestead exemptions. By formalizing these responsibilities, the bill seeks to streamline the exemption application process, thereby potentially increasing the number of homeowners eligible for tax relief. Furthermore, the ability for title companies to charge a fee for these services adds a structured financial element to the assistance provided, which could incentivize compliance and thoroughness in helping buyers navigate their homestead exemption opportunities.

Summary

House Bill 3412 aims to enhance the assistance provided to home buyers regarding residence homestead exemption applications from ad valorem taxation. This legislation mandates title insurance companies and their agents to inform buyers during the real estate closing process about the eligibility and procedures for obtaining homestead exemptions. Specifically, the bill requires a notice detailing the relevant criteria, deadlines, and application instructions to be provided to the buyers as part of the closing settlement on residential property transactions. As an added benefit, title insurance companies are also obligated to assist buyers in applying for these exemptions unless the buyer chooses to waive this right.

Contention

While this bill is primarily focused on aiding home buyers, there may be debates surrounding the imposition of fees by title insurance companies for this service. Concerns may arise over whether such fees could create additional barriers for buyers, particularly for those with limited financial resources. Moreover, the repeal of specific sections from existing tax code reflects a shift in how the exemption application process is managed, which could lead to discussions about the broader implications of this legislative change for existing applicants and potential legal interpretations of the new rules. Overall, HB 3412 is positioned to reshape the interactions between title insurance companies and home buyers significantly.

Texas Constitutional Statutes Affected

Insurance Code

• Chapter 2702. Closing And Settlement
  • Section: New Section